UK insurer Prudential says it has “ambitious
growth plans” for its Chinese asset manage- ment joint venture (JV)
CITIC Prudential Fund Management (CITIC Prudential) and, to ensure
it reaps the maximum benefit, has increased its stake in the JV
from 33 percent to 49 percent. State-owned conglomerate CITIC
Group, Prudential’s primary partner in CITIC Prudential since its
formation in 2005, also holds a 49 percent interest in the JV,
which has assets under management of $1.1 billion.

CITIC Prudential is looking to an asset
management market that was worth $111 billion in late 2006,
according to a study by professional services firm KPMG and news
agency Reuters.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Indicative of the rapid growth in China’s asset management
industry, the study noted that this figure was seven times the size
of the industry in 2002, when foreign participation was permitted
for the first time.

However, competition is stiff and growing. According to the study,
about 30 foreign companies are active in China’s asset management
industry or are in the process of establishing a presence. In late
2006, asset management companies in which foreign participants held
a stake had a total market share of 36 percent.

The top five Chinese JV asset management companies have a foreign
asset management company or foreign bank as a partner. Invesco
Great Wall Fund Management, the largest JV, was formed in 2003 by
US investment management company Invesco and Chinese broking firm
Great Wall Securities, and had assets under management of $3.97
billion at the end of 2006, giving it a 3.48 percent market
share.

The largest asset management JV in which an insurer holds a stake
is Fortis Haitong Investment Management, in which Netherlands’
bancassurer Fortis holds 49 percent and Chinese securities firm
Haitong Securities 51 percent. Established in April 2003, the JV
had assets under management of RMB18.7 billion at the end of 2006,
giving it a market share of 1.75 percent and ranking its sixth
among the JV players. CITIC Prudential’s 0.66 percent market share
at the end of 2006 ranked it 11th.